Hey there @Mwiki02,
Thank you for reaching out to us and Welcome to Wefugees!
I'm a bit confused about your status - you mention that you were accepted as a refugee, yet you also say you are still waiting for an answer on your case after your claim was rejected in 2016. Can you please clarify your situation for me?
1.) Regarding applying for German citizenship, we have had many questions on our platform before. Please have a look :-) :
Is a Goethe B1 Certificate sufficient to apply for German citizenship? When can I apply?
Can I apply for citizenship after having an Aufenthaltserlaubnis for 3 years?
These threads explain when you are eligible to apply for German citizenship.
2.) Here are a few threads from our platform regarding permanent residence permits and changing the residence title to a permit for the purpose of employment:
When can i apply for a permanent residence if i am a refugee studying at a university in Germany?
My asylum was rejected but I just finished my training - can I get a residence permit?
Is there any exception to change the asylum status to blue card or working visa?
(Especially the last one here contains a lot of helpful information regarding changing status to a working residence permit)
Also, this BAMF sheet provides information about changing residence titles: https://www.bamf.de/SharedDocs/Anlagen/EN/Publikationen/EMN/Studien/wp67-emn-wechsel-aufenthaltstiteln-aufenthaltszwecken.pdf?__blob=publicationFile
Regarding asylum applicants who want to change their status to a residence title, the following is stated on page 29:
" Unless persons who have filed an application for asylum are legally entitled to a residence title, they may only be granted a residence title prior to the legally valid completion of the asylum procedure “with the approval of the supreme Land authority, and only when vital interests of the Federal Republic of Germany so require” (Section 10 subs. 1 of the Residence Act)."
It may be best to have a closer look at your case and your options with a lawyer or a legal aid service, as the legal requirements are a bit complicated (and I unfortunately lack the legal expertise to help more)!
Feel free to reach out to us again if you need any further assistance.